Private Investors Eye Winning Rally in Tennis with Recent Focus on Players

Wimbledon is familiar ground for Novak Djokovic, arguably the best tennis player in the world with 24 Grand Slam single titles. What is less familiar ground to the 39-year-old champion is the world of private markets. That may change fairly soon.

General Atlantic announced last month that the “Djoker” is joining the investment firm as a Global Strategic Advisor to bring “perspectives from elite sport and global investing to help shape the next generation of enduring businesses.” (Side note: I ran into the tennis star looking a bit lost at the Milken conference in Beverly Hills a couple of years back and asked him what he was doing amid all those investors. He shrugged, but now he and I both know the answer.)

Tennis is the latest sport to grab the attention of investors. No doubt it has always been popular, but it has never been seen as a prized investment. Unlike the NFL, Premier League and more recently Formula 1, no straightforward way existed to invest in a single entity. The sport is highly fragmented with organizations such as the Association of Tennis Professionals, Women’s Tennis Association, Grand Slam, tournament operators, broadcasters and data companies stitched together independently.

But that actually became the opportunity. Several years ago, CVC invested $150 million for a 20% stake in WTA Ventures, a newly created commercial company that owns and manages the business side of women’s professional tennis. The WTA retained control of the sport itself, while CVC became responsible for helping to grow media rights, sponsorships, licensing, gaming, data, digital platforms and fan engagement.

That winning formula paved the way for others, with the Public Investment Fund of Saudi Arabia, partnering with the ATP, WTA and International Tennis Federation while sponsoring tournaments and investing heavily in the sport’s commercial ecosystem. Soon after, Blue Owl, the private credit/alternatives firm, moved into player-level sponsorships, especially with lower-ranked players who can monetize visibility against stars through their patch program on players’ shirts during tournament play.

And in a more recent approach, EQT, one of the top three PE firms in the world, because an official private-markets partner of the ATP through 2030 across 15 ATP tournaments in 12 markets, leveraging the organization’s global footprint and international fan base. This switched the focus for tennis not just as an equity investment but a way to leverage tennis as a global LP/brand distribution channel.

It’s safe to say now that for private investors, the investment thesis became pretty simple with all the right ingredients: Premium audience, under explored and underexploited media rights, fragmented organizations for commercial opportunities and the need for better management and innovation to increase revenues.

Mark Kollar
Partner, Prosek Partners

Mark Kollar’s monthly Letter from America can be read at The Alternative Investor.